Friday, January 16, 2009

Benefits of renting a property in London

In Singapore, it's customary (almost mandatory) for a newly wedded couple to get a place of their own. Be it a public housing flat or a private condominium, there is this societal pressure to acquire a property and many do end up with a 30-year (maximum permissible) mortgage.

The expense for accommodation does not end there; the larger a property is, the more one tends to spend on renovation and internal décor. That could easily amount to 20-30% of the property's cost. Rental? Definitely not an option - one might as well pay for one's mortgage than to pay for the landlord's mortgage. At least that was my thinking back then.

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No need to worry about mortgages

Over here in London, it doesn't really make sense for an expat to get a property. Unless you come into an inheritance, it's unlikely that you'll be able to fork out more than 20% of the property costs upfront. That said, I've got some colleagues who applied for (and got) a 100% loan and now they are worried about financing the loans with their jobs in jeopardy. Not an enviable situation indeed.
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Also...
The tenants come knockin'
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Flexibility

Yes, you'll have to contend with unreasonable landlords. But hey, at least you'll have the option to move on after a couple of months (depending on the contract) if you hate your neighbours. That aside, you might like to have a change in scenery after a year or so - no problem, just take a couple of days and and pop by the property agents and you'll be spoilt for choice.

Interestingly, it's better to rent in a when the market is down (like now) with rental prices being more competitive. Also, if for some reason you are unable to keep up with the rental, there's always the option of moving back with your folks or getting a bedsit at a hostel.

Minimum Upkeep

With most of London's water mains aging, it's inevitable that you'll get some trouble with your plumbing. Even with the influx of Polish plumbers, it's not cheap (and easy) to get a good plumber. When they actually turn up, it'll cost you around £50 at least.

There's no need to be overly concerned if you're renting. Just give the landlord a call if your boiler not working and if he's any decent, he'll get it fixed. Otherwise, start looking for another property.

Also, we tend not to spend too much in internal décor, which can be quite a tidy sum, if we are renting.

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Are you renting or do you own your current property? If you're renting, any other reasons why you're doing so?

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10 comments:

SheR. said...

I had my encounters with money-grubbing landlord and creepy one. Hated them.. but no choice. I really like renting in London. There's so much to choose from. Just purchase the Loot and take your pick!

C K said...

@SheR,
You know what? I've not tried the Loot yet. Will probably do so this time round. I've depended quite a bit on those online searches.

Would you recommend getting it directly from the landlord or through property agents?

Dutchie said...

In normal times, rentals has the tendency to go up every year. My hubby bought this house with his first pay cheque ! The mortgage tallied up to 3x what we borrowed !

2nd downside is the cost of upkeeping - there is always something that needs repairs, upgrading inside n out ! The weather here is harsh on the wooden structures - it's very tiring to do the annual sandpapering n painting every summer :-(

Upside is free lodgings since we hv paid off the mortgage. We hv seen neighbours come n go for various reasons. The risk of penalties n lower sale price has not deter them in any way.

What is ur take on property prices in Sg ?

lina said...

I have experience both in renting and buying houses. For me, for a young couple, it makes more sense to rent first then buy because you might want to change your mind about the house in just a couple of year (being young and fickle minded and all that not to mention being secured in a job and staying put in one place). I guess it isn't much of a problem in Singapore due to its size.

Martin in Bulgaria said...

I've rented and been up to the hilt in mortgage on the outskirts of London and even with an excllent teacher salary had NO disposable income; not even having my head above water. It was just an existance.
Unless you inherit a home of money for a home, you have absolutely no chance of owning your own property or affording rent unless you job is paying wads. This is one of the reasons I left the UK. I'm pleased for you if you are finding it affordable to rent and be able to go out and enjoy yourself as well.

The rent and housing merket is far to high in the UK, it has been for decades, this recession may bring prices down a bit.

SheR. said...

Hi CK.
I was introduced to the Loot by my mates in London. The locals...yeah!

My take is..don't go to agents. They are usually overpriced. I've tried going to one. And the guy wouldn't offer me any rooms under 90 quid a week!!!

However on the Loot, you can get anything from 55 quid for a bedsit to whatever size you desire!

I know there's Loot.com but it didn't seem to work for me.

EastCoastLife said...

50 pounds for a plumber! That's so expensive!

nurin-k said...

It is almost mandatory for married couples in Singapore to have a place of their own? You mean,not living with their families? Don't really get what you mean, but this is something new - being Malaysian, never heard of this. Hey, informative blog.

waitingkitty said...

I have rented many times before but I also own properties. In Singapore, the apartments are still very affordable and I think it is very advisable to buy now. When I was in Tokyo in the 90s, I had to rent as the properties were just too expensive! In HK, I rented for a year and a half and then bought my own place. I like to decorate my living place to my own liking but I wouldn't do that to an apartment that dun belong ro me. With the mortgage interest rates so low, it is actually cheaper to rent.

Korcula said...

I always thought London was very expensive to rent a place. Everyone I've known in London has always had to share but it still has it benefits over buying.